Inflation edged higher in October as the Federal Reserve is looking for clues on how much it should lower interest rates, the Commerce Department reported Wednesday.

The Federal Reserve’s preferred measure of underlying inflation accelerated in October from a year ago, helping explain policymakers’ more cautious approach to lowering interest rates.

The rate of inflation rose in October and moved further away from the Federal Reserve’s 2% goal, confirming a recent uptick in prices that could cajole the central bank into cutting interest rates less aggressively.

U.S. consumer spending increased slightly more than expected in October, suggesting the economy retained much of its solid growth momentum early in the fourth quarter, but progress on lowering inflation appears to have stalled in recent months.

Despite inflation in some sectors remaining outside the Federal Reserve's benchmark of 2%, officials indicated they are pleased with the current easing of interest rates, and more gradual cuts may follow.

Fed officials had been hoping this fall for a clean downtrend in inflation, allowing them to focus more fully on preventing an economic downturn. The data hasn't cooperated. Over the 12 months through October,

The Federal Reserve's primary inflation rate, tied to the core PCE price index, ticked higher in October, adding uncertainty to prospects for a December rate cut. The S&P 500 was slightly lower after the release as investors processed the implications for the Fed outlook.